Voluntarily applying ISSB Standards - A guide for preparers

Voluntarily applying ISSB Standards - A guide for preparers

• 02 October 2024
• Financial Reporting
• South African Accounting Academy

Summary:

The IFRS Foundation has published a Voluntary Application Guide for preparers and companies as investors call for voluntary application of ISSB Standards.

Article:

Investors globally have called on companies to voluntarily apply ISSB Standards to provide investors with decision-useful, globally comparable information in the absence of regulatory requirements to apply ISSB Standards.

This voluntary application guide is designed to help companies clearly communicate their progress as they begin to apply IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures in advance of or in the absence of jurisdictional regulation, which may specify or restrict the reporting that entities in a jurisdiction can do voluntarily.

The guide aims to support companies as they start to apply ISSB Standards voluntarily as well as helping them communicate their progress to investors.

The guide also highlights 2 elements of the Standards that are designed to support implementation for preparers:

• transition reliefs so that preparers can use a phased-in approach to the requirements. These transition reliefs include ‘climate-first’ reporting, the timing of reporting, comparative disclosures and reliefs around the disclosure of greenhouse gas emissions;
• proportionality mechanisms built into the ISSB Standards to provide adequate measures to address the range of capabilities and circumstances of companies.

The guide is the latest in a series of publications designed to support the implementation of IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures. Furthermore, when used in tandem with tools such as the ESRS—ISSB Standards Interoperability Guidance, companies can apply ISSB Standards to meet investor demand and regulatory requirements around the world.

Click here to download the 5-page Guide:

https://www.ifrs.org/content/dam/ifrs/supporting-implementation/issb-standards/issb-voluntary-application-preparers.pdf

Relevance to Auditors, Independent Reviewers & Accountants:

• Your clients, who are preparers of financial statements should be aware of the latest guidance issued by regulators, e.g. IFRS Foundation, ISSB, etc.
• This guide will be a useful tool for companies, particularly in jurisdictions without regulatory requirements to apply ISSB Standards, including providing guidance on how companies can describe their application of ISSB Standards.
• As an auditor, independent reviewer, accountant or practitioner, you ned to be aware of the latest guidance issued by relevant regulators, such as the IFRS Foundation.

Relevance to Your Clients:

• This guide will be a useful tool for companies, particularly in jurisdictions without regulatory requirements to apply ISSB Standards, including providing guidance on how companies can describe their application of ISSB Standards.
• Preparers of financial statements should be aware of the latest guidance issued by regulators, e.g. IFRS Foundation, ISSB.

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